Military Saves Week 2018

February 26 – March 3, 2018 is Military Saves week.  This is a special week, allowing installations and organizations to promote good saving behaviors and enhance financial readiness.  Financial troubles can cause security clearance issues, marriage problems, and undue stress on our military members.  Our military pay is dynamic, and can quickly slip out of control if we’re not paying attention.  Additionally, this week allows installations to provide financial resources similar to pre-sequestration (2013) levels.

During sequestration, the Department of Defense lost many of its on-site Certified Financial Planners (CFP).  In lieu of the CFPs, our Family Readiness Centers were trained on basic finances and provided tools and materials to hand out to military members.  During Military Saves week, many of our installations get a CFP on base for FREE financial counseling.  CFPs can charge up to $200 an hour for professional advice and it’s free during military saves week.  Call your Family Readiness Center for more information.

Many of our amazing credit unions participate as well—typically setting up informational booths at Family Readiness Centers.  Some credit unions offer discounted loans, new account services, and financial advice.  It’s mostly informational to encourage military members and their families to save.

This is also a good time for non-profit organizations to promote their services.  This varies depending on location, but most focus on military members in severe financial troubles.  I’ve seen non-profits offer free items for families with newborns (e.g., diapers, formula, etc.), used furniture for free, clothes, and even cash for immediate needs.

WHAT CAN I DO TO SUPPORT MILITARY SAVES WEEK?

The best way to support your installation’s Military Saves week is to personally visit your Family Readiness Center and see what services they’re offering.  If you’re a supervisor, senior enlisted, or commander (at any level), then encourage your subordinates to go with you.  At a minimum, send out an e-mail, talk to people about it, or make a public announcement during recurring meetings.  Here’s a link to the 2016 Military Saves Week Report.

Maximizing Deployment Entitlements

Dealing with deployment entitlements as a finance officer was stressful; even with the ability to significantly influence the process.  I can't imagine how the rest of the military manages it.  Through my travels, I created a small checklist to help you maximize your deployed entitlements.  By implementing these changes, you can ensure you get the most out of your entitlements during your time of sacrifice and duty.

• Review your deployment orders prior to deploying.  After talking to many people at my Joint deployed location, it seems like all the services struggle with getting Contingency, Exercise, and Deployment (CED) orders completed in a timely manner. Many of us receive our deployment orders within 3 days of flying/shipping out. It is imperative that you fully review your deployment orders and ensure they are correct. Talk to your deployed sponsor and review your reporting instructions.  Ensure the per diem, rental car, lodging, passport, etc. information is all correct and applicable. Getting timely and accurate reach back support is difficult. I strongly believe in treating every day like an interview...and many of these Air Force Finance shops are not doing well. Your orders determine what you're authorized, so make sure they're correct before you depart.
• Get your deployment entitlements started as soon as possible. I'm the J8 Director at my deployed location, and it took nearly 60 days for my deployed entitlements to start; for the other Air Force, it took over 60 days.  We're in our 4th month and one Air Force member's entitlements still haven't started yet.  That is unacceptable.  Find out who at your deployed location processes your deployed entitlements and then complete whatever actions you need to.  The quicker you start earning those entitlements, the quicker you can start saving, investing, or paying down debt.  Over the course of your 4-12 month deployment, having the money sooner can provide more money by gaining more interest, dividends, or paying down your debt balances.
• Increase/start your ROTH TSP while deployed.  If you're at a deployed location, you will earn income TAX FREE, then it will be placed and grow in your ROTH TSP TAX FREE, and then when you withdrawal the money, it will be TAX FREE.  This is probably the best thing about a Combat Tax Zone Exclusion (CTZE).
• Start the Savings Deposit Program (SDP).  I found out that the different services manage this program differently as well.  In the Navy, you can deposit the whole $10K with a cashier's check to begin earning maximum interest (10% APR).  Other services only allow a certain amount each month from your paycheck.  This is probably the best rate of return you can find given that it's theoretically risk free.
• Review your DTS accrual vouchers (SPPs) and amend them monthly.  Thoroughly review your deployed orders in DTS (or whatever system is used) and amend them monthly to add any expenses you've incurred not originally in the main orders.  Some deployments require almost no amendments and others require monthly to add actual rental car expenses or forward-deployed expenses.  Also, check to ensure you've accurately disbursed enough to your Government Travel Card (GTC) to pay it off, but the rest to your personal account.  It took 5 business days to move the additional funding from my GTC to my personal bank account.  By correctly splitting the disbursement, you can minimize the way from transferring from your GTC.
• If you have the cash to accommodate, consider using your personal credit cards instead of the GTC.  The GTC charges foreign currency conversion fees.  IAW the Joint Travel Regulation, Appendix G, these foreign currency conversion fees are reimbursable; however, many finance offices will want you to individually list the fees.  This would require frequent amendments and copies of your GTC statements.  I have a Chase credit card and a USAA debit card and neither charge a foreign currency conversion fee.  USAA allows you to temporarily increase your ATM Withdrawal limit.  I have to pay rent on my deployment, so I get it all out at once without having to pay any foreign currency conversion fees.  If your accruals aren't paid promptly, then you can be building up a balance on your GTC.  Again, the quicker you can get your money and put it in use, the better.

Please let me know if you have any other suggestions so I can frequently update this "living" list.

Military Retirement Plan

A majority of the people I've helped with their finances have been military members within 5 years, or even days, from retiring. They're concerned about only receiving 50% of their basic pay and not receiving BAH or BAS anymore. Anytime is a good time to start getting your finances settled but the earlier you start in your military career the better.


If done correctly, military members can retire from working at 40 years old. Imagine not having to work at the end of a 22-year career and only being 40 years old. When military members retire, after 20 years in the military, we get 50% of our basic pay (only basic pay) and an additional 2.5% each year after. If you start at the beginning of your career, you can have enough to make up the remaining portion of your basic pay when you retire.


For example, an E-8 at 22 years makes $5,115.30 a month (in 2014). The E-8 is entitled to 55% of his or her basic pay in retirement. 50% for twenty years and 2.5% for both years after. This would be $2,813 every month for the rest of his or her life, or $33, 756 annually and if you start saving now, you can earn enough income to get paid like you did when you were in active duty. You can potentially make enough to earn what you were getting in Housing Allowance (BAH) and Food (BAS).


To make up the remaining pay the E-8 would have to save up $552K and earn 5% when he or she retires. This may seem like a lot of money to save up, but by starting your Thrift Savings Plan (TSP) right away, investing in an Individual Retirement Account (IRA), buying real estate, living within your means and keeping debt to a minimum you can easily save this much money (or near it). $552K earning 5% a year would earn you $27,624 a year.


This discussion is theoretical because you can't withdrawal those savings from your TSP and IRAs until you are 59 1/2. But the point is, starting early and saving as much as you can will put you in a prime retirement position.

Opinion: Military Pay and Benefits To Be Cut?

During a recent keynote address at the Global Security Forum, Defense Secretary Chuck Hagel warned that we need to look at cuts in military pay and benefits so we don't have a military that is, "well-compensated, but poorly trained and equipped, with limited readiness and capability."  This is a very emotional, politically-charged and uncomfortable conversation to have and any politician looking to support this viewpoint would be facing certain election death.  This may surprise many of my readers, but I support this viewpoint.

There are many reactions that you may have against cutting military pay and benefits and they are understandable.  As a Finance Officer in the United State Air Force, I admittedly am suggesting that my pay and benefits get cut.  But this country and our culture has a problem with overspending.  We do it as a population and it bleeds into our political policy. The Department of Defense (DoD) is the largest expenditure of taxpayers' dollars so it makes mathematical sense that the DoD should bear a large portion of the reductions.

According to Secretary Hagel, over 50% of our costs come from military pay and benefits and while budgets have decreased our pay and benefits have increased.  Our pay and benefits are a prime target until the DoD can learn to be fiscally responsible with their contract over runs, a horrible fiscal-year process and reducing the normal "fraud" that has become part of our culture.  Our pay should be normalized to the rest of the country.  Politicians are too scared to reduce our pay like a civilian corporation would which leads to the opposite of not increasing our pay like a civilian corporation would.  Our pay should match the ebb and flow of our civilian population and the economy since it is taxpayers' that fund the DoD.

The military offers the best benefits package of any civilian corporation.  At the end of a 20-year career, people can become theoretical millionaires.  Our health-care costs have skyrocketed past the civilian populations.  Take a sample size of your lowest-level unit and see how many aren't even using the amount of benefits that we get as military members.  Our fitness centers are becoming larger and larger at every base while we have flying operations that can't fly and soldiers that can't be equipped properly.  These are all additional costs that can be reduced.

Many people would argue that we should cut CEOs' pay and celebrities' pay before we touch an Airmen's pay currently serving in Iraq protecting our freedoms.  Now, while that example brings up emotional truths, we must realize that the consumer funds CEO and celebrities' pay while the taxpayer funds the DoD.  Right or wrong, our civilian population has voted with their dollars to keep CEOs and celebrities' pay at the levels they are at now, but they did not choose to pay for the large military industrial complex.

Many people would also argue that we shouldn't touch the pay and benefits and we should stop spending all the money on our broken end-of-year process that encourages a soft level of fraud to ensure we zero out the books so we don't get cuts the next year.  While this is infuriating to me in my career, the amount of money that is actually spent wouldn't come close to a meaningful percentage enough to make significant changes to our force.  I've personally seen the process and while I'll admit it's broken, leadership from the lowest levels to the highest levels can reduce and stop it.

Many people would argue that the DoD is not the problem and it's all the entitlement spending our country gives out.  This is a politically-charged emotion and indeed, this country's entitlement spending is out of control.  But to achieve the amount of reductions we would need to reduce the deficit and control the national debt, we would have to totally eliminate our social safety net in America and in real economics that is as dangerous as spending too much on entitlements.  A country must have a strong social safety net to encourage and support massive growth.  That being said, a compromise could be worked out for a matching reduction.  So for every dollar that we reduce in military pay and benefits we should also reduce entitlement spending by a dollar.  I don't know if that has been recommended by any politician yet, but if it hasn't, I would like the credit :)

Our personal debt, national deficit and the national debt are becoming too large too ignore.  We must reduce spending and we must lower our dependence on foreign credit.  In my opinion, our national debt is more of a security threat than any terrorist group in the world.  In my opinion, everyone in America believes we should reduce spending as long as it doesn't affect their own lifestyle.  They want cuts to everyone else.  It's the "not my bubble" theory.  By percentages, the majority of the spending comes from the DoD hence a proportional amount of cuts should come from the DoD.  And if 50% of the DoD's costs come from military pay and benefits, then mathematically the cuts should also come from pay and benefits.  Although it's a difficult position to take, I support Secretary Hagel's decision on reducing military pay and benefits.

Government Shutdown Lessons Learned

I have refrained from publishing my personal opinion on the Government Shutdown, what led to it and who is to blame, but I thought it was necessary to publish some lessons learned from it and how it impacts your personal finances.

· Emergency Savings - I joined the military because of the "security" and the "guaranteed paycheck", among other benefits.  This is no longer a benefit and the security of our pay has been affected by Sequestration, the Government Shutdown and we'll see from here.  It is required by law that military members must be paid for services completed; however, there is no law that states when we must be paid.  Luckily for us, Congress passed the Preservation of Military Pay Act to ensure we got paid.  For this reason, having an emergency savings available would help alleviate any short-term disruptions to your pay.  If our pay was delayed for a long time, you could rely on this emergency savings.  Having an emergency savings account is usually the top of any personal finance recommendations.

· Tuition Assistance (TA) – If you’ve been waiting for the “right time” to start college, then you may miss the opportunity to take advantage of 100% TA, or no TA with the current Government Shutdown.  Decreased budgets, Sequestration and the Shutdown have all proven that TA is an expense that will be continuously looked to reduce or get rid of.  During a Chief of Staff of the Air Force Visit recently, he told our base that there are strong discussions that will most likely to reduce TA to 75%.  That means you will have to pay the remainder or use some of your applicable GI Bill.  Bottom Line: You should start taking advantage of the college benefits now before this benefit goes away.

· Separating/Retiring from the Military – Ensure that if you are planning on separating or retiring from the military that you’ve done considerable planning ahead.  Make sure you aren’t making the decisions based off of one bad assignment.  Civil Servants are an extremely valuable part of our Military’s total team and have provided the continuity while the military was engaged in Iraq and Afghanistan but as the wars wind down and we get into worse financial constraints, our civilian personnel will be primary targets for reductions.  Sequestration and the Government Shutdown has shown that hiring freezes, furloughs, reductions in annual price index raises and other entitlements are top tools for budget reductions.

5 Tips for Dealing With Military Finance

The military pay system is very dynamic.  Unlike most civilian companies, your pay, and things that affect it, change continuously.  In the past 14 years that I've been in (10 of which were not in finance), finance hasn't had the best reputation with military members.  Our career field is constantly working on how best to manage the systems we are forced to use and provide the best customer service possible.  Here are some things that you can do to help yourself.

- File your travel voucher within 5 days.  This is on the back of your orders and is considered a Direct Order; however, it's not enforced.  The majority of complicated pay cases stem from individuals not filing their travel vouchers within 5 days.  You can't help the long part of rejects, slow finance response times and actual processing, but you can help your portion which is filing the voucher.  Filing your travel vouchers w/in 5 days reduces pay debts and travel card delinquencies and also ensures you are receiving the correct entitlements.

- Don't suffer in silence.  If you're not receiving the answer or service you think you should from finance, then ask for an NCO, the flight chief or the OIC (a.k.a. the Financial Services Officer).  Don't abuse the junior enlisted technician or you may create a negative response for that technician and will increase poor customer service.  Regardless of what most people think, most finance personnel want to help customers.  Don't leave finance feeling like your problem is unresolved.

- Know our regulations.  Most people say, "Why do I have to know your regulations?  That's your job."  That is very true, but it's your pay.  No one cares more about you getting paid correctly than you.  Our military pay comes from appropriated funds, which means it's taken from taxpayers and given to us by Congress.  This means the money has to only go to what's it authorized for.  So, unfortunately for many customers, if a military pay technician tells you the wrong answer, the government will still seek collections in the form of a debt.  It sucks that the military pay technician gave the wrong advice, but you still owe the money back.  The most common regulation cited for all services is the Joint Federal Travel Regulations (JFTR) for military and the Joint Travel Regulations (JTR) for civilians located here: http://www.defensetravel.dod.mil/site/travelreg.cfm

- Be persistent.  Due to various reasons, some finance can control, some we can't, resolving your pay issue may be a lengthy, laborious and complicated process.  Be persistent, but professional, with finance to ensure it gets resolved.  Don't just fire an e-mail and forget and hope it gets resolved.  Get a positive ID on the corrective action.  If we say it will pay out in 5 days and on the 5th day it doesn't, give us a call back.

- Leave constructive feedback.  If you have constructive feedback, please give it to us.  Use whatever method your local finance has for customer service feedback.  We can't improve unless we know what to improve.  If you had a positive experience, please leave that feedback too.  Nothing is more motivating than the Commander receiving a thank you note due to a positive customer service feedback.

I was a customer like you for 10 years before crossing into finance, so I bring those experiences with me and we, at least in the Air Force, are doing everything we can to get back to the basics and give the best possible service we can.  We need your help to ensure you're doing your part to take care of your finances and focus on the mission.